The Philadelphia Federal Reserve said its index of regional manufacturing rose to 17.6 in February from 15.2 in January. That follows reports the past two days that also pointed to a pickup in business at the nation's factories.

The report lifted stocks of companies that process raw materials because increased manufacturing should boost sales. Newmont Mining Corp. and glass maker Owens-Illinois Inc. each rose more than 2 percent.

The market drifted higher in light trading volume so analysts cautioned against reading too much in to the latest gain. Light volume indicates that many investors with concerns about the market are staying on the sidelines.

The market's gains were modest in the early hours of trading after Wal-Mart Stores Inc.'s reported a drop in quarterly sales at its flagship U.S. stores and issued a disappointing forecast.

At the same time, the Labor Department reported that the number of workers seeking unemployment benefits for the first time rose 31,000 to 473,000 last week. Economists polled by Thomson Reuters forecast claims would fall. Unemployment is a major obstacle to a sustained recovery.